4 ms·

> Right from the start, Warren says, Amazon would have to separate its “Basics” business, which sells products under a house brand, from the rest of Amazon, and

> Right from the start, Warren says, Amazon would have to separate its “Basics” business, which sells products under a house brand, from the rest of Amazon, and Google’s advertising business and its search business would have to be split apart. What exactly does this mean? Google ads can't show on Google search? Couldn't they just lease out ad space to whatever Alphabet company gets spun off to handle search? Same thing with Amazon basics.

icebraining 7y ago
Well, one of them wouldn't be an Alphabet company anymore, much like AT&T had to divest from its Baby Bells.
- cmpolis 7y ago
  Right, telecom is a great example of where breaking up an entity benefited the consumer and prevented monopoly. /s (all the bells merged back in some form or another into present day AT&T and Verizon).
  - wavefunction 7y ago
    I think a strong case can be made that breaking up Ma Bell has provided all sorts of benefits that have lasted since then. If nothing else, at least we have two behemoths in AT&T and Verizon rather than one.
  - munk-a 7y ago
    Mostly because the SEC has been asleep at the wheel when it comes to breaking up telco merges - and the FCC has been happily steered to help reinforce anti-competitive practices... like, for instance, blocking municipality internet build-outs.
- d1zzy 7y ago
  I'm curious how people imagine this would even work in practice. Those departments share the same internal code base[1] and I would expect splitting those dependencies up would take a decade of work, especially when code is constantly changing so almost all development has to be frozen while the split is happening which essentially means those services stop making updates which means it's a dead Internet company. [1] https://news.ycombinator.com/item?id=17605371 https://news.ycombinator.com/item?id=17605371
  - icebraining 7y ago
    Why split the code? Both get a full copy of the repo, except one can only run¹ the ad system and the other the search engine. ¹ I mean by law, not technically unable.
    - repolfx 7y ago
      I used to work at Google, so let's look at the practical difficulties with this idea of splitting. It's not impossible - AdSense exists after all - but it'd create a lot of problems. Firstly, it's not simply about drawing some arbitrary lines between search and AdWords and saying, right, split done. Other companies have to be able to compete on equal footing. Today Google is one company with a unified infrastructure for everything. It's not a bunch of unrelated businesses loosely strapped together as Warren seems to be imagining. For instance "undoing" the merger of DoubleClick would be impossible as DoubleClick doesn't exist anymore, in any form. One of the first things Google did after the acquisition was reinterview everyone and fire about half the staff. Their tech infra is long gone, etc. So what does that mean in practice. Well, the ad auction has to run physically very close to the search engines, because search responds very fast which means ads must also run very fast. This would be hard for other firms to do well because Google datacenters are often built in the middle of nowhere for various reasons. If a search has to hit a Google DC then go back out and across America to some other DC run by some other ad firm, then search latency will go up and people will search less, or more likely, those ads will just miss their deadline more often, won't run, and lose out to son-of-AdWords which is faster. Could competing firms run colocated in Google datacenters? Maybe. Google Cloud exists. But you can't choose in Google Cloud to run in space allocated next to existing Google services, in fact their locations constantly change and isn't public. Ads datasets and processing requirements can be very large. If a building is full, and a new ad company says "to be competitive we must be physically close", that means something else has to move out to make space. To what extent is Google allowed to say, no, we need that space to run Maps servers or something like that? How often can Google force co-located servers to move? Does a regulator start micro-managing Google's datacenter space? Now what about the rest of the integration? Clickfraud detection involves deep integration between web search and the ads system. Is Google obliged to make all that infrastructure on the web side available to any ad firm that requests it? What stops me creating a trivial "legit" ad firm, obtaining all of Google's secrets and then selling them to click fraudsters for massive profit? In theory all these problems can be solved, but likely only by creating constant political fights, everywhere, all the time. And for what? Warren is engaged in leftist populism: the vast majority of people in the real world don't care about splitting tech firms up like that. Even in anti-US-tech Europe, polls show people's top concerns are usually immigration and terrorism. "Can other firms compete in the AdWords auction" doesn't appear in the list at all, it's a non issue.
ska 7y ago
> What exactly does this mean? Google ads can't show on Google search? I think it means they couldn't both be google, any more. [edit]: to be specific, they couldn't both be alphabet companies anymore, I worded that sloppily but following the quoted material.
- manfredo 7y ago
  One is Google. The other is some ads company owned by alphabet. They're separate companies, in the same vein that YouTube is not the same as Google.
  - 0xffff2 7y ago
    Presumably it means they also couldn't both by Alphabet anymore. For the law to be meaningful in any way, it would have to be written such that they have to be separate companies that do not share a common ancestor.
  - deleted 7y ago
    [deleted]
dillondoyle 7y ago
I dont understand the reality of this either. So how does 'google search' pay the infrastructure costs? Do they open search to allow other SSPs to bid? but 'google search' would still have to take a % of the price. what about youtube and DCM?
greycol 7y ago
It would mean the search company would be different than the ad company. They could still work together but it would probably result in lawsuits (by shareholder claiming they're not looking after their interests by not looking to higher profiting contracts) if google search didn't do due diligence in offering up the ad space to auction by other companies. Worst outcome would be that your search history would be up for sale to multiple companies unless an exclusivity deal was financially more reasonable (or the backlash could be argued to make the sale unprofitable in other ways). It would also be interesting to see how other parts of the company are split up and whether their sole source of revenue would be charging for previously free services to customers or out right selling user data to the Google Ad division or whatever company will pay the most. Meanwhile Google Ad would have to be doing it's due diligence in buying this data. Does it make sense to pay for redundant data when someone runs google ads, analytics, recaptchas, and apis, does that mean the slow death of one. Meanwhile google cloud might be making bank charging all the little googlets as they slowly transition to azure or aws. Definitely be a huge shakeup though it's reasonable that transition plans and deals would significantly slow this down to a longer time scale rather than over night.

icebraining 7y ago

Well, one of them wouldn't be an Alphabet company anymore, much like AT&T had to divest from its Baby Bells.

cmpolis 7y ago
Right, telecom is a great example of where breaking up an entity benefited the consumer and prevented monopoly. /s (all the bells merged back in some form or another into present day AT&T and Verizon).
- wavefunction 7y ago
  I think a strong case can be made that breaking up Ma Bell has provided all sorts of benefits that have lasted since then. If nothing else, at least we have two behemoths in AT&T and Verizon rather than one.
- munk-a 7y ago
  Mostly because the SEC has been asleep at the wheel when it comes to breaking up telco merges - and the FCC has been happily steered to help reinforce anti-competitive practices... like, for instance, blocking municipality internet build-outs.
d1zzy 7y ago
I'm curious how people imagine this would even work in practice. Those departments share the same internal code base[1] and I would expect splitting those dependencies up would take a decade of work, especially when code is constantly changing so almost all development has to be frozen while the split is happening which essentially means those services stop making updates which means it's a dead Internet company. [1] https://news.ycombinator.com/item?id=17605371 https://news.ycombinator.com/item?id=17605371
- icebraining 7y ago
  Why split the code? Both get a full copy of the repo, except one can only run¹ the ad system and the other the search engine. ¹ I mean by law, not technically unable.
  - repolfx 7y ago
    I used to work at Google, so let's look at the practical difficulties with this idea of splitting. It's not impossible - AdSense exists after all - but it'd create a lot of problems. Firstly, it's not simply about drawing some arbitrary lines between search and AdWords and saying, right, split done. Other companies have to be able to compete on equal footing. Today Google is one company with a unified infrastructure for everything. It's not a bunch of unrelated businesses loosely strapped together as Warren seems to be imagining. For instance "undoing" the merger of DoubleClick would be impossible as DoubleClick doesn't exist anymore, in any form. One of the first things Google did after the acquisition was reinterview everyone and fire about half the staff. Their tech infra is long gone, etc. So what does that mean in practice. Well, the ad auction has to run physically very close to the search engines, because search responds very fast which means ads must also run very fast. This would be hard for other firms to do well because Google datacenters are often built in the middle of nowhere for various reasons. If a search has to hit a Google DC then go back out and across America to some other DC run by some other ad firm, then search latency will go up and people will search less, or more likely, those ads will just miss their deadline more often, won't run, and lose out to son-of-AdWords which is faster. Could competing firms run colocated in Google datacenters? Maybe. Google Cloud exists. But you can't choose in Google Cloud to run in space allocated next to existing Google services, in fact their locations constantly change and isn't public. Ads datasets and processing requirements can be very large. If a building is full, and a new ad company says "to be competitive we must be physically close", that means something else has to move out to make space. To what extent is Google allowed to say, no, we need that space to run Maps servers or something like that? How often can Google force co-located servers to move? Does a regulator start micro-managing Google's datacenter space? Now what about the rest of the integration? Clickfraud detection involves deep integration between web search and the ads system. Is Google obliged to make all that infrastructure on the web side available to any ad firm that requests it? What stops me creating a trivial "legit" ad firm, obtaining all of Google's secrets and then selling them to click fraudsters for massive profit? In theory all these problems can be solved, but likely only by creating constant political fights, everywhere, all the time. And for what? Warren is engaged in leftist populism: the vast majority of people in the real world don't care about splitting tech firms up like that. Even in anti-US-tech Europe, polls show people's top concerns are usually immigration and terrorism. "Can other firms compete in the AdWords auction" doesn't appear in the list at all, it's a non issue.

ska 7y ago

> What exactly does this mean? Google ads can't show on Google search? I think it means they couldn't both be google, any more. [edit]: to be specific, they couldn't both be alphabet companies anymore, I worded that sloppily but following the quoted material.

manfredo 7y ago
One is Google. The other is some ads company owned by alphabet. They're separate companies, in the same vein that YouTube is not the same as Google.
- 0xffff2 7y ago
  Presumably it means they also couldn't both by Alphabet anymore. For the law to be meaningful in any way, it would have to be written such that they have to be separate companies that do not share a common ancestor.
- deleted 7y ago
  [deleted]

dillondoyle 7y ago

I dont understand the reality of this either. So how does 'google search' pay the infrastructure costs? Do they open search to allow other SSPs to bid? but 'google search' would still have to take a % of the price. what about youtube and DCM?

greycol 7y ago

It would mean the search company would be different than the ad company. They could still work together but it would probably result in lawsuits (by shareholder claiming they're not looking after their interests by not looking to higher profiting contracts) if google search didn't do due diligence in offering up the ad space to auction by other companies. Worst outcome would be that your search history would be up for sale to multiple companies unless an exclusivity deal was financially more reasonable (or the backlash could be argued to make the sale unprofitable in other ways). It would also be interesting to see how other parts of the company are split up and whether their sole source of revenue would be charging for previously free services to customers or out right selling user data to the Google Ad division or whatever company will pay the most. Meanwhile Google Ad would have to be doing it's due diligence in buying this data. Does it make sense to pay for redundant data when someone runs google ads, analytics, recaptchas, and apis, does that mean the slow death of one. Meanwhile google cloud might be making bank charging all the little googlets as they slowly transition to azure or aws. Definitely be a huge shakeup though it's reasonable that transition plans and deals would significantly slow this down to a longer time scale rather than over night.